World Bulletin/News Desk
A proposed corporate tax break on profits derived from research and development done in the United States is winning some bipartisan support in Congress, with the promise that it could spur jobs and innovation.
A "patent box" tax break is in the policy mix as lawmakers target full-scale tax reform in 2013. The idea is to give companies a tax break, an d a sizable one, on profits derived from patented products that originated with U.S. research and development.
Several European Union countries have embraced the patent box and the United Kingdom is set to adopt it next year. A bipartisan pair of U.S. lawmakers this week introduced a bill with a 10 percent tax for qualifying income.
The idea has its skeptics, both on its merits and viability. Critics say another tax break for business would lead to a race to the bottom in tax rates and potentially cut revenues. Backers say the global economy requires countries to compete to lure innovation.
"There is a race going on and the idea that we can just pretend we are not going to run the race is not a luxury we have," said Robert Atkinson, president of the Information Technology and Information Foundation, a think tank that gets some corporate funding.
Several experts at a recent meeting in Washington said a U.S. patent box, named for a box printed on tax return forms that companies would check to claim the break, might be too complex to implement.
"The main challenge in designing a patent box regime is to isolate income attributable to patents," said Peter Merrill, an economist at PricewaterhouseCoopers and former chief economist at the congressional Joint Committee on Taxation.
Merrill said the evidence links patent box policies to increased patent activity, but not necessarily to job growth.
In the United States, both Democrats and Republicans widely back a broad revamp of the U.S. tax code, likely including a cut in the corporate tax rate, which is high by global standards.
Movement of American jobs abroad is a hot political issue amid a sluggish economy and a tight presidential race.
President Barack Obama and some fellow Democrats support special tax breaks to encourage companies to move jobs back to the United States, while rival Republican presidential hopeful Mitt Romney says Obama's policies have hurt the economy.
Comprehensive tax reform, last accomplished in 1986 under President Ronald Reagan, is a daunting project expected to take years. Backers are pushing the patent box as a step forward.
"We should start by mixing the old, Americans' might in manufacturing, with the new, America's might in innovation," said Democratic Representative Allyson Schwartz, who has offered a patent box bill with House Republican Charles Boustany.
Any congressional action on the Schwartz-Boustany bill, or a parallel measure in the Senate, is unlikely before 2013.
A patent box proposal is among options in a corporate tax reform blueprint released last year by Republican Representative David Camp, chairman of the tax-writing Ways and Means Committee in the House of Representatives.
"While they haven't endorsed it, they are looking at it as a viable option," said Boustany spokesman Neal Patel.
The U.K.'s new system led drug giant GlaxoSmithKline Plc to promise more jobs in Britain. In March the company, which has cited the country's new patent box as a lure, said it would invest $792 million in a biotech plant there.
Germany’s ambassador to Ankara says German companies operating in Turkey should think about tomorrow
After months of disagreement, OPEC members last week hammered out a deal to cut oil output for the first time in eight years.
Ali Shareef al-Emadi predicted growth of 3.4 percent in 2017, in line with an International Monetary Fund estimate and up from a projected 3.2 percent this year.
"Many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system," Carney said in a speech at Liverpool's John Moores University.
European stock markets are also set for a weak start, with Italy underperforming as investors brace for turbulence and political crisis in the euro zone's heavily indebted third-largest economy.
The euro tumbled on Monday after Italian Prime Minister Matteo Renzi said he would resign as he conceded defeat in a referendum over his plan to reform the constitution
Rouhani's 2017-2018 budget is based on oil prices of $50 per barrel, up from $40 last year, with a focus on unemployment, water resources, railways and the environment.
Turkish parliament has already ratified the deal on construction of ‘TurkStream’ natural gas pipeline
The September rate was revised to 9.9 percent from the 10 percent first given last month.
Many analysts had expected the producers' cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.
The report, which collects views of economists, business contacts and others in the 12 Federal Reserve districts in preparation for the monetary policy meeting next month, noted improved retail sales and home construction in most regions.
If the cartel does not reach a deal to cut output, prices could fall below $40 a barrel
European air travel giant Lufthansa has been battling its own pilots over pay and conditions for more than two years.
Failure to get an accord on Wednesday could send oil prices tumbling and deal a further blow to the credibility of the 56-year-old Organization of the Petroleum Exporting Countries.
Around midday, shares in Italian lenders Unicredit and Banco Popolare were down 4 percent compared with Friday's closing levels.